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INVESTOR PRESENTATION

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INVESTOR PRESENTATION Powered By Docstoc
					INVESTOR PRESENTATION
National Bank Financial
Canadian Financial
Services Conference

Frank Techar
President and CEO
Personal & Commercial
Banking Canada
March 21 2007
FORWARD LOOKING STATEMENTS
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Bank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be
included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are
made pursuant to the ‘safe harbor’ provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act
of 1995 and any applicable Canadian securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives
and priorities for 2007 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, and the results of or outlook for
our operations or for the Canadian and U.S. economies.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that
predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially
from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements as
a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions
expressed in the forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic conditions in the
countries in which we operate; interest rate and currency value fluctuations; changes in monetary policy; the degree of competition in the geographic and business
areas in which we operate; changes in laws; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our
customers and counterparties; our ability to execute our strategic plans and to complete and integrate acquisitions; critical accounting estimates; operational and
infrastructure risks; general political conditions; global capital market activities; the possible effects on our business of war or terrorist activities; disease or illness that
impacts on local, national or international economies; disruptions to public infrastructure, such as transportation, communications, power or water supply; and
technological changes.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors could adversely affect our results. For more information, please see the
discussion on pages 28 and 29 of BMO’s 2006 Annual Report, which outlines in detail certain key factors that may affect BMO’s future results. When relying on
forward-looking statements to make decisions with respect to Bank of Montreal, investors and others should carefully consider these factors, as well as other
uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Bank of Montreal does not undertake to update any forward-looking
statement, whether written or oral, that may be made, from time to time, by the organization or on its behalf.

Assumptions about the performance of the Canadian and U.S. economies in 2007 and how that will affect our businesses were material factors we considered when
setting our strategic priorities and objectives and in determining our financial targets, including provisions for credit losses. Key assumptions included that the
Canadian and U.S. economies would expand at a moderate pace in 2007 and that inflation would remain low. We also assumed that interest rates in 2007 would
remain little changed in Canada but decline in the United States and that the Canadian dollar would hold onto its value relative to the U.S. dollar. Although the U.S.
dollar strengthened relative to the Canadian dollar in the first quarter, we believe that our other assumptions are valid. We have continued to rely upon those
assumptions and the views outlined in the following Economic Outlook in considering our ability to achieve our 2007 targets. In determining our expectations for
economic growth, both broadly and in the financial services sector, we primarily consider historical economic data provided by the Canadian and U.S. governments
and their agencies. Tax laws in the countries in which we operate, primarily Canada and the United States, are material factors we consider when determining our
sustainable effective tax rate.



                                                                                               INVESTOR CONFERENCE – MARCH 21•2007                                                   2
BMO - Q1 2007 FINANCIAL HIGHLIGHTS
                  Net             EPS     Cash             Specific   Tier 1       Cash
                         EPS                       ROE
                Income           Growth   EPS               PCL       Capital   Productivity
Excluding
Restructuring   $673MM   $1.30   11.1%    1.32    18.0%   $52MM       9.90%       61.7%
Charge

As Reported     $585MM   $1.13   (3.4)%   1.15    15.7%   $52MM       9.90%       66.9%



Key Messages (Measures below exclude Restructuring Charge)
    Good quarter driven by high quality operating performance
    EPS grew 11.1%, excluding restructuring charge
    Revenue growth of 4.1% Y/Y
    Expenses well managed, growing 2.8% Y/Y
    Cash productivity of 61.7% improved 72 bps
    Net interest margins stable for P&C Canada and Total Canadian Retail
    Total bank effective tax rate of 26.1%

                                             INVESTOR CONFERENCE – MARCH 21•2007               3
Q1 2007 GROUP NET INCOME
P&C Canada Net Income of $292MM
                                                                                    IBG Net Income of $219MM
 Increased $30MM or 12% Y/Y
                                                                                      Decreased $3MM or 2% Y/Y
 Revenue growth of 6.4% driven by
 volume growth and higher revenue                                                     Revenue decreased 3.6% as trading
 in card business                                                                     revenues declined from record high
                                                                                      levels in Q1 06
 Expense growth of 4.1% due to
 expansion of sales and service staff                                                 Expenses declined 1.2%



P&C U.S. Net Income of US$25MM                                                      PCG Net Income of $95MM
                                                                                     Increased $4MM or 4.2% Y/Y
 Decreased US$3MM or 15% Y/Y
                                                                                     Revenue growth of 8.9% due to
 Revenue growth of 0.8%
                                                                                     higher fee-based and commission
 Expense growth of 8.0% supporting business                                          revenue
 volumes and costs associated with new branch
                                                                                     Expense growth of 9.7%
 technology platform

                                Corporate Services Net Income of $38MM
                                   Excludes restructuring charge
                                   Increased $40MM Y/Y due to lower taxes, better
                                   revenues and lower expenses




                                                               INVESTOR CONFERENCE – MARCH 21•2007                         4
FINANCIAL HIGHLIGHTS – P&C CANADA
P&L ($MM)                   Q1 06   Q4 06      Q1 07

Net Interest Income (teb)   726     755         760

Non-interest revenue        370     403         406

Total Revenue               1,096   1,158       1,166

PCL                          78      79          80

Expenses                    624     675         649

Provision for taxes         132     132         145

Net Income                  262     272         292



NIM (bps)                   267     266         267
Cash Productivity (%)       56.7    58.1        55.5




                                       INVESTOR CONFERENCE – MARCH 21•2007   5
BMO - 2007 STRATEGIC PRIORITIES

         Build a superior Canadian personal banking business to ensure that we
         meet all of our customers’ financial needs

         Further strengthen our commercial banking businesses to become a
         leading player everywhere we compete

         Grow our wealth management businesses, capturing an increasing share
         of this high-growth market

         Drive strong returns and disciplined growth in our North American
         investment banking business

         Improve our U.S. performance and expand our network to become the
         leading personal and commercial bank in the U.S. Midwest

         Build a high-performing, customer-focused organization supported by a
         world-class foundation of productive technologies, efficient processes,
         disciplined performance management, sound risk management and
         governance


                                       INVESTOR CONFERENCE – MARCH 21•2007         6
PERSONAL & COMMERCIAL BANKING – CANADA
Where we’re going, what we’re doing

Management Agenda

   Build loyalty through a better customer experience
   Build loyalty through a better customer experience

   Optimize our distribution network and specialized sales
    Optimize our distribution network and specialized sales
   forces
    forces

   Improve our personal banking performance
    Improve our personal banking performance

   Continue to leverage our strengths
   Continue to leverage our strengths




                                        INVESTOR CONFERENCE – MARCH 21•2007   7
                                                             Personal Loans
PERSONAL LOANS –                                       Year-Over-Year Growth (%)

PERFORMANCE                                                    7.4      7.9       8.2      8.5
                                                                                                     9.1




  Strong volume growth Y/Y

  Customer Welcome Offer driving
  volume growth:                                       Q1 06         Q2 06        Q3 06        Q4 06         Q1 07

      Average of 2.5 products per
      customer on account opening                  Personal Loans Market Share (%)
                                                                                              10.51
  Market share increase in personal                             10.42           10.40

  lending 11 bps Q/Q, 9 bps Y/Y




                                                                Q1 06         Q4 06        Q1 07

                                       Personal share statistics are issued on a one-month lag basis. (Q1.07: December 2006)
                                       Source:, Consumer Loans– Bank of Canada,



                                      INVESTOR CONFERENCE – MARCH 21•2007                                                  8
                                                            Personal Revenues ($MM)
PERSONAL BANKING –
THE OPPORTUNITY                                                 572
                                                                              597           590




  Improve personal deposits and
  residential mortgages results
                                                 Personal
      Accelerate growth in                       Personal includes Residential Mortgages, Personal Loans,
                                                 Personal Deposits, Term, Mutual Funds, Insurance and Other.
      personal deposits
                                                      Market Share (%)
      Focus on proprietary           Residential Mortgages       Personal Deposits
      channels to grow residential
                                                  13.52
      mortgages                        13.52                    13.36
                                                                                     12.62
                                                                                                    12.16          12.06




                                          Residential Mortgages                               Personal Deposits

                                                                Q1 06        Q4 06       Q1 07
                                           Personal share statistics are issued on a one-month lag basis. (Q1.07: December 2006)
                                           Sources: Mutual Funds – IFIC, Credit Cards – CBA, Consumer Loans & Residential
                                           Mortgages – Bank of Canada, Personal Deposits - OSFI

                                         INVESTOR CONFERENCE – MARCH 21•2007                                                   9
PERSONAL BANKING –
THE OPPORTUNITY

 Revenue growth and net promoter scores
 key metrics to measure performance

 Opportunity to increase lending within
 current risk appetite concentrating on
 secured lending

 Review mix of staff and continue to build
 specialized sales forces, specifically
 mortgage specialists and financial
 planners




                                             INVESTOR CONFERENCE – MARCH 21•2007   10
PERSONAL BANKING –
OUR OPPORTUNITY

 Continue to build and optimize our
 branch network with a focus on key
 communities

 Reduce account opening time

 New technology to consolidate
 information results in more time to
 spend with customers




                                       INVESTOR CONFERENCE – MARCH 21•2007   11
COMMERCIAL BANKING –                                    Commercial Revenue ($MM)
                                                                                         337
PERFORMANCE
                                                                              321
                                                                  314

 Continued strength in the upper end of
 the commercial market as well as
 strong growth in loan balances over
 $1MM

 Maintained #2 market position in
                                                  Business Loan Market Share (%)                            1
 business loans <$5MM
                                                                                              18.79 18.89
                                                 18.50                              18.54
 Good volume growth Y/Y in total                          18.28 18.25

 commercial

     Average loans and acceptances                     $0 - $1MM                         $1MM - $5MM
     up 6.8%
                                                                  Q1 06       Q4 06       Q1 07
     Average deposits up 10.2%             1 Business loans (Banks) are issued by CBA on a one calendar quarter lag basis
                                           (Q1.07: September 2006)
                                           Market share restated to reflect the latest CBA data



                                          INVESTOR CONFERENCE – MARCH 21•2007                                        12
COMMERCIAL BANKING –
OUR OPPORTUNITY


 New operating units focused solely on
 commercial business in the key
 Toronto, Montreal and Vancouver
 markets will facilitate future growth

 Specifically in the $0-1MM market we
 have a program to grow, starting with
 simplified product offerings and
 expansion of the front-line sales force




                                           INVESTOR CONFERENCE – MARCH 21•2007   13
CARDS –                                                Card Revenue ($MM)
                                                                        240         239
PERFORMANCE
                                                            210

 Strong revenue growth Y/Y

 In F2006:

     Lowest attrition rate in 7 years                   Card Net Retail Sales
                                                          Market Share (%)
     23% increase in new accounts, 105%                                             14.32
     increase in branch originations                                   14.23

 55% of customers have a BMO MasterCard
                                                            14.08

 Market share

     #3 in Canada
                                                              Q1 06       Q4 06       Q1 07
     Corporate card #6 in North America for      1 Net Retail Sales (NRS) refer to card volume less
     Large Corporate/Mid Market                  transfers and cash advances. NRS include both retail and
                                                 corporate card business, and are on a two-month lag basis.
                                                 (Q1.07: November 2006)

                                        INVESTOR CONFERENCE – MARCH 21•2007                               14
CARDS –
OUR OPPORTUNITY

 More holistic view of payments,
 including Moneris®

 Greater and more effective
 utilization of branch network

 Expand the security and
 usability of our product




                                   INVESTOR CONFERENCE – MARCH 21•2007   15
KEY TAKEAWAYS:

 Solid Franchise

 Opportunities exist – we are
 taking action

 Improvements expected to take
 hold over the course of 2007




                                 INVESTOR CONFERENCE – MARCH 21•2007   16
Q&A                           Q406
                              Q406
           FINANCIAL RESULTS
      Investor Community Conference Call


                           KAREN MAIDMENT
         Chief Financial and Administrative Officer
                               November 28 • 06
INVESTOR RELATIONS
CONTACT INFORMATION
VIKI LAZARIS, Senior Vice President
viki.lazaris@bmo.com
416.867.6656

STEVEN BONIN, Director
steven.bonin@bmo.com
416.867.5452

KRISTA WHITE, Senior Manager
krista.white@bmo.com
416.867.7019




E-mail: Investor.relations@bmo.com
Fax: 416.867.6656
www.bmo.com/investorrelations

				
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